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Dr. David Smith Interprets March Employment Data in LA Business Journal

On Friday, Dr. David Smith, associate professor of economics, was quoted in the Los Angeles Business Journal on the release of the California Employment Development Department's January data. Dr. Smith says, "We’ve seen a steadying of the unemployment rate at around 5 percent, which is indicative of a slower-growing economy.” Regarding December’s job total being revised upward by 33,000, an increase of 0.7 percent, Dr. Smith says, "This amounts to a 1 percent jump in payroll employment, which is about the level we would expect to result from these annual data revisions." (See full article below)

L.A. County’s unemployment rate dipped back below 5 percent in January despite the usual seasonal loss in payroll jobs, according to state figures released Friday.

The state Employment Development Department reported January’s unemployment rate at 4.9 percent, down from 5.1 percent in December and from 5.6 percent in January 2016. Some of that drop came as more L.A. County residents found work, but some also resulted from a slight drop of 1,000 in the county’s labor force of just over 5 million.

“We’ve seen a steadying of the unemployment rate at around 5 percent, which is indicative of a slower-growing economy,” said David Smith, associate professor of economics at the Graziadio School of Management at Pepperdine University.

The county’s unemployment rate was lower than the statewide average of 5.1 percent, but was slightly higher than the national rate of 4.8 percent.

Meanwhile, the county shed nearly 79,000 payroll jobs in January to almost 4.4 million, mostly due to seasonal drops after the end of the holiday season. The biggest drop came from the retail sector, where payroll jobs fell by 22,000; leisure/hospitality, including food services, was the next biggest loser, shedding 19,000 jobs.

However, after taking into account all of these seasonal factors, payroll employment actually rose by 11,000 in January, a separate state data table updated Friday showed.

And there was more good news. The Employment Development Department revised upwards the number of payroll jobs in the county as part of an annual recalibration process.

So, November’s previous payroll job total was revised upward by 48,000 to almost 4.5 million, a 1.1 percent increase. December’s job total was revised upward by 33,000 also approaching 4.5 million, an increase of 0.7 percent.

“This amounts to a 1 percent jump in payroll employment, which is about the level we would expect to result from these annual data revisions,” Smith said.

These higher estimates for the number of jobs come as the state through its annual revision process gets a better handle on new business establishments that have been adding jobs, he added.

Turning to the closely watched year-over-year figures, county payroll employment increased by 62,500 or 1.5 percent. While still a respectable growth rate, that’s down from the 2 percent year-over-year growth rate the county had a year ago.

The health care/social assistance industry was by far the biggest gainer, up 27,000 jobs. Smith said that’s not surprising, since nationally, healthcare employment has been rising steadily as the baby boomer generation ages and needs more care. But he said the job growth in this sector might have been even higher were it not for the uncertainty over the direction of national health care policy.

Manufacturing was the only sector to report significant job loss over the past year, shedding 8,400 jobs. A good chunk of those job losses, 3,100, came from the apparel industry, which has been struggling and has seen major local clothing lines such as American Apparel and Nasty Gal file for bankruptcy protection.

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